Ethereum's daily mean gas price has reached an all-time low of about 2.9 Gwei, resulting in average daily transaction fees falling to $0.85. This drop in costs has occurred despite stable or slightly increasing transaction volumes, suggesting strong network health and continued user engagement.
The significant reduction in transaction costs is attributed to the Dencun upgrade implemented on March 13, which introduced 'Blobs' to economize data publishing for Layer 2 networks like Arbitrum, Base, and Optimism. This has made it more affordable for these networks to post data on Ethereum.
However, while lower fees are beneficial for users, they present challenges for investors. The reduced transaction costs could lead to user and liquidity fragmentation, especially as a substantial portion of Ethereum's usage shifts to Layer 2 networks.
Despite these changes, Ethereum's price has struggled, falling 4.2% last week and currently trading at $2,591. This price decline has persisted since the Dencun upgrade and continues despite the recent approval of spot Ethereum exchange-traded funds (ETFs).
